What does energy productivity mean for mining? What does your energy $ buy?

Transcription

1 What does energy productivity mean for mining? What does your energy $ buy? Dr Mary Stewart, General Manager and Director, Energetics 24 February 2016

2 AFSL Disclaimer The information contained in this presentation is for information purposes only and is not intended to be financial product or investment advice or a recommendation. Energetics is authorised to provide financial product advice on derivatives to wholesale clients under the Corporations Act 2001 AFSL No: In providing information and advice to you, we rely on the accuracy of information provided by you and your company. This presentation has been prepared without taking into account the objectives, financial situation or needs of any individual. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek legal and taxation advice appropriate to their jurisdiction. Statements made in this presentation are made as at the date of the presentation unless otherwise stated. Past performance Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance. Future performance Forward-looking statements, opinions and estimates provided in this presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements including projections, guidance on future earnings and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. Actual results, performance or achievements may vary materially for many projections because events and actual circumstances frequently do not occur as forecast and these differences can be material.

3 The popular tagline of the mining sector is that the miners are serious about productivity PwC Mining Productivity, 2015

4 Overview Is energy productivity just a rebranding of energy efficiency? Measuring energy productivity Companies Commodities A view of what your energy $ buys Different points of intervention: contract vs reduction What does this mean for policy?

5 Energy efficiency vs energy productivity Energy efficiency kwh per production amount kwh per tonne total material moved kwh per ROM tonne Energy intensity kwh per tonne product Energy productivity kwh per $ product $kwh per $ product

6 Energy efficiency vs energy productivity Energy efficiency kwh per production amount kwh per tonne total material moved kwh per ROM tonne Energy intensity kwh per tonne product Energy productivity kwh per $ product $kwh per $ product

7 Corporate energy productivity information

8 Corporate energy productivity Energy information Sustainability reports/gri G3 and G4 Totals available, breakdown for regions not consistent CDP focus on emissions Energy totals for regions not broken down by source Financial information Consistent and comprehensive Rules are well established

9 Corporate energy productivity Company EBITDA as % of revenue Revenue per energy consumed (USDm/PJ) Vale Not reported AngloAmerican BHPBilliton Glencore/Xstrata Rio Tinto

10 Commodity energy productivity information

11 Commodity energy productivity Where did I look Sustainability reports CDP reports Production reports Annual reports

12 Commodity energy productivity Where did I look Sustainability reports CDP reports Production reports Annual reports EEO reports

13 Commodity energy productivity Commodity group Sales value per energy consumed (USDm/PJ) Iron ore Gold Coal thermal and coking Base metals Ni, Cu, Zn, Pb, Mn Alumina

14 Site energy (electricity) productivity considerations

15 What does your electricity $ buy? Retail charges Consumption (kwh) Peak and off peak Environmental LRET (kwh) SRES (kwh) Network Fixed (day) Capacity (kva and rolling kva) Demand (kwh) Other contestable Market (kwh) Metering (day) etc

16 Applying this to an open cut coal mine kwh Months

17 Based in 15 minute interval data kwh 18 months of interval data Days

18 Electricity KPIs (kwh/tonne)

19 Breaking down time of use

20 Applying differential costs

21 Electricity cost KPIs Electricity $/tonne product Electricity $/tonne ROM

22 Commodity prices and exchange rates are not static

23 Electricity productivity KPI

24 How can this be improved?

25 How can this be improved?

26 What does this mean? Policy What is the aim? Economy-wide requires a commodity focus Corporate performance is complex to generalise company specific KPIs Company-specific KPIs Publicly available information sets are not adequate to inform energy productivity outcomes Site improvement Understanding what your $ energy buys is important Considering value of product sold can obscure results Energy efficiency is not the whole answer Contracts should be reviewed and renewed Link to commodity performance through sales value

27 Meet our people Follow us Brisbane Canberra Melbourne Perth Linkedin.com/company/energetics-pty-ltd Join our group Subscribe Australian Energy and Carbon Forum Energetics free newsletter provides companies with insight into energy and carbon issues.

28